COVID-19 Coronavirus: Federal Income Tax Filing Deadline Extended; Payment Caps Removed

Notice 2020 – 17 to Notice 2020 – 18: What has changed?

Following up on our last update, the U.S. Internal Revenue Service (the “IRS”) issued Notice 2020 – 18 announcing that taxpayers may defer filing Federal income tax returns and making Federal income tax payments due April 15, 2020 to July 15, 2020 without incurring interest or penalties. The updated guidance supersedes previously issued Notice 2020 – 17 and eliminates all limits on the amount of Federal income tax payments that may be postponed. Any interest, penalty, or addition to tax with respect to such deferred Federal income tax filings and payments will be calculated from July 16, 2020. On its website, the IRS posted FAQs regarding Notice 2020-18, which clarify many questions raised by the Notice.

What has not changed?

Federal income tax payments due after April 15, 2020 may not be deferred. Therefore, fiscal year taxpayers with tax payments due after April 15, 2020 but before July 15, 2020, or estimated tax payments due on June 15, 2020 continue to be bound by their respective payment deadlines.

This relief applies only to Federal income tax payments (including payments of tax on self-employment income) and Federal income tax returns (including filings for extensions) due on April 15, 2020. It does not apply to any other Federal taxes such as gift taxes, estate taxes, or excise taxes, or to filings related to such tax payments. While the relief does not apply to any state or local taxes, a number of states have either sought to conform to federal tax filing extensions, or have already adopted their own respective extensions.